NZ Dollar Heads for Second Weekly Drop

The US dollar fell today, heading for a second weekly decline, as the problems of the US and Europe makes traders less willing to invest in currencies perceived to be riskier.

The currency of the South Pacific nations is linked to economic growth and thus reacts negatively to the prevalent pessimistic mood on markets. Such mood intensifies as the threat of the debt crisis spreading to Italy and Spain increases. The economic situation in the US isn’t much better and the report about consumer sentiment later this day is expected to show the confidence of the US citizens declined. The kiwi (the nickname of the New Zealand currency) erased most of its losses since the initial decline and now continues to go higher.

NZD/USD was down from 0.8316 to 0.8279 today as of 10:03 GMT, while reaching 0.8180 intraday. NZD/JPY dropped from 63.88 to 63.49 and the daily low today was 62.71.

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